Environment groups raised concerns at the time, warning the Nationals would prioritise the interests of irrigators over environmental concerns for the Murray River.

South Australian Greens senator Sarah Hanson-Young said Mr Joyce’s comments showed he was not fit to be federal water minister.

South Australian Water Minister Ian Hunter has also called for Mr Joyce’s removal.

“He is absolutely incapable of doing the job he has been given,” he said. South Australia also criticised the NSW government’s probe into the matter as “absolutely inadequate”.

The former head of the National Water Commission, Ken Matthews, was this week appointed to head up the NSW investigation into the allegations. The investigation’s terms of reference include investigating water theft at specific properties in northern NSW.

It will also examine whether a senior official helped irrigators undermine the Murray Darling Basin Plan, and whether a major investigation into water management breaches was stymied.

But Mr Hunter doubts it will get to the bottom of alleged long-term gaming of the water rules, and wants NSW Regional Water Minister Niall Blair to broaden its scope.

“Mr Blair needs to restore public confidence in his state’s water compliance regimes that provide the drinking and irrigation water for millions of Australians,” Mr Hunter said.

“This inquiry won’t do it.” A spokeswoman for Mr Blair said any issues outside the terms of reference will be referred to the appropriate authorities for review.